After reaching a record of $124,000, Bitcoin saw a sharp increase in BTC and ETH transfers to centralized exchanges. This trend usually indicates rising intentions to sell assets.
Sharp Increase in BTC and ETH Inflows
Following Bitcoin's record high of $124,000, crypto markets witnessed a sharp increase in BTC and ETH transfers to centralized exchanges. This typically signals increasing intentions to sell, while inflows of stablecoins, often used for purchasing crypto, did not follow suit.
Excess Supply and Price
This imbalance was captured by the BTC ETH inflow ratio, calculated as the combined inflows of BTC and ETH divided by stablecoin inflows. The ratio surged to a peak of 4.0×, historically indicating excess crypto being moved for sale against a limited pool of buying power. The increase in the inflow ratio closely aligned with a price correction in major cryptocurrencies. When the market is flooded with sellable assets without matching stablecoin inflows, prices tend to retrace.
Normalization of Inflow Ratio
Since the spike, the inflow ratio has gradually declined. Currently, the 7-day moving average sits around 2.7×, indicating that selling pressure is easing. At the same time, daily inflow volumes for BTC and ETH have cooled to about $5 billion, suggesting that the intense post-ATH selling wave is losing steam.
The decrease in the inflow ratio from 4.0× to 2.7× indicates a more balanced market environment, potentially paving the way for more stable price action or the groundwork for the next move, depending on whether demand can catch up.
